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Speculation was mounting last night that shares in Direct Line’s stock market listing will be priced at about 175p each, valuing Britain’s biggest motor and household insurer at just over £2.6 billion.

A pricing at this level would mark a boost for Royal Bank of Scotland, which is selling at least 30 per cent of Direct Line and had faced scepticism from prospective institutional buyers.

Although the valuation would be below the initial £3.2 billion mooted before the investor roadshows got under way last week, it is above the £2.4 billion value that could have been reached at the lower